The Council of Governors has set a firm demand for Sh534.4 billion as the equitable share for counties in the 2026–27 budget, signalling an impending showdown with the National Treasury over revenue allocation.
The amount marks an increase of Sh106.97 billion from the current county allocation and surpasses both the Sh458.74 billion proposed by the Commission on Revenue Allocation and the Sh420 billion suggested by the Treasury in its Budget Policy Statement.
Governors argue that the additional funding is essential to meet growing devolved responsibilities, accommodate Universal Health Coverage workers, implement salary reviews for county staff, and support the transfer of functions from the national government.
“The Ministry of Health, in consultation with the Council of Governors, agreed that the workers will be transitioned to county governments in the 2026–27 financial year on permanent and pensionable terms, with the budget transferred through the Division of Revenue in perpetuity,” the council said in a statement.
The breakdown of the proposed increment includes Sh35 billion earmarked for revenue growth, Sh8.94 billion to transition UHC workers to county payrolls, Sh10.06 billion for the implementation of the third and fourth remuneration and benefits review cycles, and Sh65.97 billion to support the first phase of gazetted devolved functions.
The push for more funds comes as the country’s shareable revenue is expected to rise from Sh2.6 trillion to Sh2.98 trillion in the next financial year, an increase of Sh342.6 billion.
Yet, while the CRA recommends Sh458.7 billion for counties and Sh2.5 trillion for the national government—reserving Sh9.6 billion for the Equalisation Fund—the Treasury has proposed only Sh420 billion for counties, a modest Sh5 billion rise attributed solely to revenue growth.
“The proposed amount by the Treasury fails to reflect the expanding mandate of counties and the projected economic growth of 5.3 per cent in 2026 and 2027,” the governors said. They insisted that counties should receive at least Sh35 billion from the expected additional revenue, pointing out that most of the increase is set to go to the national government.
On the issue of UHC worker transitions, governors highlighted that thousands of health worker contracts are due to expire between April and September 2026. Immediate budget provision, they argue, is necessary to ensure continuity.
They also accused the CRA and Treasury of ignoring allocations for devolved functions that have already been identified for transfer.
